March 24 (Bloomberg) -- Orders for long-lasting goods
unexpectedly fell in February, raising concern over the
sustainability of the rebound in U.S. business investment.

Bookings for goods meant to last at least three years
dropped 0.9 percent after a 3.6 percent gain the prior month
that was larger than initially reported, the Commerce Department
said today in Washington. Other reports showed fewer Americans
filed claims for jobless benefits last week, and consumer
comfort dropped to the lowest level in seven months.

The data on orders stands in contrast to other reports this
month that showed production picked up in February and factory
purchasing managers were more optimistic. While rising exports
to China and other emerging economies will benefit manufacturers
like Texas Instruments Inc., the need for U.S. companies to
replace outdated equipment may not be as pressing as earlier in
the recovery.

“There is a risk that capital spending will be flat in the
first half of the year,” said Harm Bandholz, chief U.S.
economist at UniCredit Global Research in New York. At the same
time, he said, “the consumer will pick up the slack, driven by
the labor market and also by the tax deal” President Barack
Obama reached with Republicans in December.

The median forecast of 80 economists surveyed by Bloomberg
News projected a 1.2 percent increase in orders after a
previously reported 3.2 percent rise in January. Estimates
ranged from a 1.6 percent decline to a 4.5 percent gain.

Fewer Claims

The number of workers filing claims for jobless benefits
declined by 5,000 to 382,000 in the week ended March 19, Labor
Department figures showed, in line with the median forecast of
economists surveyed by Bloomberg. The total sum of those
receiving government payments dropped to the lowest level in
almost three years.

The Bloomberg Consumer Comfort Index dropped to minus 48.9
in the period to March 20 from minus 48.5 the prior week,
another report today showed. The measure of the current state of
the economy slumped to a 15-month low.

The highest gasoline prices in more than two years weighed
on families already dealing with rising grocery bills. The
report showed confidence among households with annual incomes
exceeding $50,000 fell to the lowest level since March 2010,
representing a risk to consumer spending, the biggest part of
the U.S. economy.

“Households continue to operate under duress,” said John
Herrmann, a senior fixed-income strategist at State Street
Global Markets LLC in Boston. “Inflation may prove both higher
and more persistent than desirable.”

Shares Climb

Stocks rose for a second day after corporate profits topped
analysts’ estimates. The Standard & Poor’s 500 Index increased
0.9 percent to 1,309.66 at the 4 p.m. close in New York. The S&P
Supercomposite Machinery Index rose 1.2 percent. Treasury
securities fell, pushing the yield on the benchmark 10-year note
up to 3.41 percent from 3.35 percent late yesterday.

Orders for durable goods excluding transportation equipment
decreased 0.6 percent after a 3 percent January decline. They
were forecast to rise 2 percent. A plunge in demand for military
equipment last month contributed to the decline.

Other Reports

Manufacturing output climbed 0.4 percent in February after
a 0.9 percent January gain that was three times as large as
initially estimated, figures earlier this month from the Federal
Reserve showed. The Institute for Supply Management’s factory
index rose in February to the highest level since May 2004.

Given the discrepancies, “we would not be inclined to read
too much into this report,” David Greenlaw, chief financial
economist at Morgan Stanley in New York, said in a note to
clients on the durable goods figures. “We expect continued
rapid growth in capital spending over the course of 2011.”

The manufacturing industries that account for 11 percent of
the economy are likely to remain at the forefront of the
recovery as businesses replenish inventories.

“We have seen orders build through the quarter,” Ron
Slaymaker, vice president of investor relations for Dallas-based
Texas Instruments, said on a conference call with analysts March
8. “Based upon what we’re seeing through the first two months,
we would expect that orders will be up solidly compared to the
fourth quarter.”

Tax Break

The business spending that helped lead the economy out of
recession in mid-2009 may get a boost from the December tax
legislation that allows companies to depreciate 100 percent of
investments in capital equipment this year and 50 percent in
2012.

Demand from fast-growing countries like China and Brazil is
spurring U.S. shipments of machinery and consumer goods. Exports
in January rose to the highest level on record.

One potential hurdle is the March 11 earthquake and tsunami
in Japan, which prompted a nuclear crisis and caused electrical
outages. U.S. companies are still trying to gauge the effects of
the tragedy on international supply chains.